Book Review – Free: The Future of a Radical Price by Chris Anderson

This book made my “To Read” list after reading the review by Seth Godin a few weeks ago, and I was pleasantly surprised by the depth of the research and historical analysis Anderson presented.  (I should not have been surprised as his previous book, The Long Tail, was equally as well-researched and fascinating as well.)  I’ve read numerous writings and magazine articles on the topic of “freeconomics,” but never anything that was both uniquely informative and practically useful.

Anderson begins with a historical perspective, reminding the reader that the use of “free” pricing is far from new and has been a part of marketing efforts for centuries.  In understanding why some recent business models utilizing “free” have prospered while others have failed, I found this section particularly interesting.  In short, the explanations for recent successes are not significantly different than similar tactics utilized decades or centuries earlier.

The next sections of the book effectively contrast “free” in the digital world with “free” in the physical world – or “bits and atoms,” as Anderson calls them.  Again, I experienced an Aha moment between my understanding and my previous intuitions about why some attempts at “free” make sense while others feel more like snake oil.

But my absolute favorite section of the book is the appendices at the end, particularly the Free Rules and listing of Fifty Business Models Built on Free.  The Free Rules are described as The Ten Principles of Abundance Thinking, but also provide a great executive summary of the book written in the form of action steps.  As you read the book, if you are left with questions about how to implement what you’ve learned, the Free Rules are a great roadmap.  And then the 50 sample business models provide great examples of the Rules in use successfully.

Essentially, Anderson suggests that there are several successful business models built on “free,” namely:
- Direct cross subsidies (one product subsidizes another)
- Three party markets (one customer class subsidizes another)
- Freemium (some customers subsidize the others)

And that commodity information that is abundant and essentially the same to all readers will trend towards free, while customized information that is unique, meaningful, and scarce will remain or become expensive.

I would recommend Free to anyone looking to deepen their understanding of today’s economy and why many businesses (and people) on the web function as they do.  I think it is particularly enlightening to business owners, those wanting to become business owners, or those looking for opportunities to supplement their more traditional income.  I found it to be a great mix of history and background information, thoughtful analysis, and useful action items.

While writing this post, I also thought of a handful of entrepreneurs that “get it.”  Not that they give everything away for free, but they understand how to embrace free in their business models.

- Donna Kozik, creator of the Write a Book in a Weekend Course, successfully utilizes free reports and ezines to introduce readers to her talents and resourceful information. Then, when you’re ready to make the leap and start publishing, her self-study course or weekend events are available for purchase to customers that have self-selected.
- Chris Guillebeau, creator of Unconventional Strategies for Life, Work, and Travel, frequently talks of freely giving away quality information.  In fact, he released the highly-proclaimed 279 Days Manifesto completely free, without any requirements whatsoever in April 2009.  For readers that are interested in more specific strategies and information related to unconventional travel or lifestyle development, Chris does offer those products for purchase.

There are certainly plenty of other companies and entrepreneurs that “get it,” so please share other great examples below.